Enterprise restructuring is expected to improve efficiency in transition economies. With data from former East Germany, we compare the efficiency of family farms and partnerships with large-scale successor organizations of the collective and state farms (LSOs). Using parametric and nonparametric techniques, we show that LSOs display lower technical efficiency than do family farms and partnerships but that this difference is small and declining during transition, mainly as a result of structural changes in agriculture. Family farms are not as scale efficient as partnerships and LSOs, and partnerships are superior to all other organizational forms.

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© 2001 President and Fellows of Harvard College and the Massachusetts Institute of Technology
2001
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